Thank you very much.
I'd like to thank you for giving me this opportunity to come and talk to you all today.
I'm an economist. I'm a health economist at the University of Manitoba. I'm here with a very simple request today. I'm going to ask you to set aside a very small amount of money in this budget exercise going forward so that you can work with the provinces to facilitate a series of guaranteed annual income experiments, or pilots, across the country.
As you may know, there's a surge of interest in guaranteed annual income from around the world. Finland and several cities in the Netherlands have just initiated pilots. Switzerland is about to vote on a citizens' referendum later this year. In low- and moderate-income countries, experiments are flourishing. In Canada a number of organizations, including the public health agencies of Canada and Ontario, the national association of food banks, the Canadian Medical Association, the Canadian Association of Social Workers, along with many others, have endorsed the idea of a guaranteed annual income. Mayors and councils of several large cities, including Calgary and Edmonton, have endorsed the idea, as have some provincial governments.
In Canada when we talk about a guaranteed annual income, we usually present it as a refundable tax credit based on income, similar to that of the national child benefit or the OAS and GIS. In a sense, what we're asking for is to see what happens if you extend the ideas behind the national child benefit to working-age benefits, or adult benefits. Both of these, by the way, are forms of GAI—the OAS, GIS, and the national child benefit. As family income increases, the guaranteed annual income would decline, but less than proportionately. This of course creates a work incentive, but it also establishes a minimum level of income for all Canadians. The proposed guaranteed annual income would stand in place of the current arrangements for adult or working-age benefits in this country. As such, it would form a coherent part of a progressive state.
Interestingly enough, some of the best evidence for how a guaranteed annual income would function in a high-income country comes from this country, from Canada. In the mid-1970s the federal government, in partnership with the Province of Manitoba, established a project called “Mincome”, which ran for four years in the city of Winnipeg and the town of Dauphin, Manitoba, which had a population of about 10,000. The project ended without a final evaluation after the provincial government changed, but I and others have been able to go back to find out what happened to the participants in the experiment and what the consequences were.
It turned out that many people at the time were worried about a reduction in employment—if you give people a guaranteed income, why wouldn't everybody stop working? There was a small reduction in terms of numbers of hours worked, primarily because women used the guaranteed annual income to buy themselves longer maternity leaves at a time when the state guaranteed four or six weeks, and partly because boys, young adolescents, took their first full-time job at 18 instead of 16. One of the major findings of my project was that Mincome was associated with an increase in the high school completion rate, particularly for young boys.
I looked at the health data and found that hospitalizations fell by 8.5% relative to a matched control group, largely because of improved mental health, as did visits to family doctors.
The likely benefits of a guaranteed annual income are many. We can look at improved physical and mental health, and improved quality of life for low-income people, including the working poor. Current adult benefits do a very poor job of dealing with the working poor. We can look at a system of social benefits better attuned to the economic changes we've seen over the past 30 or 40 years associated with the rise of precarious employment and the rise of inequality. We also can look at increased education and job training, which leads to greater productivity and less use of other social services; and reduced use of allied public services that are worsened by poverty, such as health care, special education, criminal justice.
I actually work at a downtown hospital at the University of Manitoba. As you walk through the hallways, it's very easy to see that what we treat in that hospital is very largely the consequences of poverty as opposed to bad luck. We'd also see a more efficient delivery of social services, less intrusive social services, and a reduction in the stigma associated with income support, all of which are associated with better family functioning and better child development outcomes.
Mincome took place 35 years ago and the wise government might want to update its findings. This is a pretty big change in the way we deliver social benefits in this country. Any government committed to developing an evidence-informed public policy could do much worse than to support the many calls and initiatives that have come from provincial and local governments across the country, from professional organizations across the country, and from the public at large.
Thank you.